The devastating earthquake in Turkey also massively damaged the Turkish spinning industry.
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According to estimates by the Winterthur spinning machine manufacturer Rieter, two thirds of the country’s spinning capacities are affected. “In terms of the extent of the damage, there are all shades, from practically intact to completely destroyed,” CEO Norbert Klapper told the AWP news agency. Turkey is one of the most important yarn producers in the world. Accordingly, last year Rieter made almost a fifth of its sales with spinning mills in the country.
Rieter itself has to mourn one fatality as a result of the earthquake. All other Rieter employees and their families are doing well. According to CEO Klapper, Rieter employs a total of around 70 people in Turkey, mainly in the affected region.
According to the information, the Winterthur group now wants to put the service station in Kahramanmaras in southern Anatolia back into operation as a priority. According to Klapper, the first orders have already been processed again because an intact hall on a neighboring property could be rented. In addition, one is working with the customers to clarify the situation in their factories in detail.
Even before the earthquake, Rieter was going through a mixed year in 2022. Sales rose sharply because a large mountain of orders could be processed. Acquisitions and price increases also had an impact. Specifically, sales increased by 56 percent to CHF 1.51 billion.
But the prices were not increased enough to maintain the margin in view of the raw material inflation. According to the information, costs in connection with the supply bottlenecks and the acquisitions also influenced the result.
The operating margin (EBIT margin) fell to 2.1 from 4.9 percent. And the bottom line is that the company made a profit of just CHF 12.1 million after CHF 31.7 million.
The outlook for the current year 2023 is vague. The company continues to benefit from the many orders that have come in over the past two years. Sales in the order of magnitude of the previous year can therefore be expected.
As already reported in January, the current demand is no longer as lively. Incoming orders in 2022 fell by 48 percent to 1.16 billion.
For the coming months, management continues to expect below-average demand for new systems. An upturn is not expected until the second half of the year.
The earthquake in Turkey is now also a risk for business development, the consequences of which are currently not foreseeable.
